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NFTC’s Tax Expert on BEPS: U.S. Business Concerns Remain Unresolved
Date: 12/1/2015
Written By: Jennifer Cummings, The Fratelli Group for NFTC, (202) 822-9491

Washington DC – Today, in testimony before the House Ways and Means Tax Policy Subcommittee, National Foreign Trade Council (NFTC) Vice President for Tax Policy Catherine Schultz discussed the G-20 and OECD report on the Base-Erosion and Profit Shifting (BEPS) project.

Schultz highlighted key U.S. business community concerns related to the BEPS project, which remain unresolved:

 
"While the final BEPS report has been issued and endorsed by the G-20, the work is not complete. There are many issues that must still be dealt with in 2016 and the years ahead. Open items include work on implementing the tax treaty recommendations to date through the multilateral instrument, work on achieving consensus on the attribution of profits to Permanent Establishments (PEs), work on achieving a consensus on how to apply profit splits where appropriate, the implementation of rules on hard-to-value-intangibles, and the implementation of rules on the treatment of headquarter activities and other low-value adding services. ...
 
"The NFTC is concerned about the general aggressive global tax enforcement environment. The BEPS report Action 11 analyzed base erosion and estimated how much is lost worldwide to aggressive tax planning. Interestingly, this analysis was not done prior to the start of the BEPS project, but only at the very end. If it was an objective concern, and not a political project, the amount of base erosion would have been examined at the outset of the project, not at the very end of it."

In her testimony, Schultz also touched on the need for U.S. tax reform, stating:

"The NFTC believes the current U.S. tax law is outdated and must be modernized by enacting tax reform that reduces the U.S. corporate income tax to be more in line with our trading partners and adopts a competitive territorial tax system that does not disadvantage U.S. businesses competing in foreign markets. Competitive U.S. tax reform would address many of the concerns raised in the BEPS project."

The full testimony can be found here.
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About the NFTC
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules- based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
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